Bitcoin is consolidating just below the key resistance level of $104,000, setting the stage for a potential breakout. After surging past the $98,000 threshold, BTC has entered a textbook bull flag pattern—marked by narrowing daily candles and decreasing volume—a classic sign of a continuation move. This tight price action above the 26-day EMA signals accumulation rather than distribution.
Technically, Bitcoin remains strong, with the price well above both the 50 and 100 EMAs, confirming bullish momentum in both short- and medium-term trends. The Relative Strength Index (RSI) has cooled slightly, reducing the risk of an overbought correction and opening the door for another leg up.
Meanwhile, implied volatility in the crypto options market is declining—a typical precursor to large directional moves. This compression phase often leads to volatility expansion, suggesting that BTC is coiling for a significant breakout or breakdown.
If Bitcoin breaks decisively above $104,500, it would likely invalidate any lingering bearish divergence and push the asset into price discovery mode, with $110,000 as the next major target. However, a failure to hold the psychological $100,000 level could lead to a brief retracement toward $98,000 or even $95,000, especially if the 26 EMA support fails.
While volume has tapered during this consolidation phase, that’s to be expected and reinforces the case for a major move ahead. Traders are watching closely as the market prepares for what could be a defining moment in Bitcoin’s current rally. A confirmed breakout would solidify bullish sentiment, while a breakdown could test key support zones. Either way, volatility is imminent, and Bitcoin’s next move could set the tone for the broader crypto market.
